Don't Bet on It: Why Businesses Should Not Forego Patent Protection in Favor of the Newly Expanded Prior User Defense

Abstract

The America Invents Act (AIA) expanded the prior user defense beyond business methods to all types of patents. In effect, this right enables an entity to protect an invention as a trade secret and never be liable for patent infringement. While facially tantalizing, this Comment argues that entities who would have, under the old patent regime, protected their intellectual property with patents should not forego patent protection because of the new prior user rights under the AIA. Paramount to this argument is the uncertainty inherent in successfully asserting the prior user defense. Relying on a prior user defense is taking the chance that (1) the prior use was more than a year before a competitor’s patent application, (2) no one disclosed the invention, and (3) the prior use satisfied the standard for being “commercial.” Additionally, foregoing patent protection could jeopardize venture capital funding and a prior user might lose the right if the commercial use ceases or the right is judged to be unconstitutional.

Keywords: prior user rights, prior user defense, patent, trade secret, America Invents Act, AIA, prior user, invention

JEL Classification: O34, K20, K11